For richer or poorer

Gaye Coates was flabbergasted after her bank of nearly 20 years decided to call time on their business relationship.

In Business6 Minutes

Gaye Coates was flabbergasted after her bank of nearly 20 years decided to call time on their business relationship.

Science tells us humans are genetically conditioned to make attachments and it seems the DNA of farmers is especially wired to form enduring bonds, connecting us to our land, our animals and to the people and institutions that impact on our businesses.

Almost two decades ago we bonded in a relationship, vowing to honour and obey, committed together for richer and for poorer. We entered this relationship for the long term, believing in the greater strengths of working in partnership.

So, it came as an unpleasant surprise when after almost 20 years together, our financial partner seemingly woke up one morning with the realisation that they did not love us anymore and out of the blue advised that it was best if we look for a new bank to work alongside.

As with many divorces, the disconnect came down to wanting different things, or in our case we wanted more – more lending to take on a rather large project to address some of our big environmental challenges. This wasn’t a dream concept, but a project well planned with conscious and clarified thought, discussed from the outset and clearly fenced by us with the pragmatism that comes with knowing exactly where our business sits in financial terms.

In the background, adding to this disharmony was the geographical context that we cohabited with the bank. We are in the unenviable ‘best house in the worst street’ situation and bank confidence in the security of West Coast land is remarkably pessimistic despite our better than average return on equity. Quite simply and delivered in an equally impersonal manner, our bank felt they were no longer able to do the ‘We Do How’ with us.

This hurt. Farmers face no shortage of difficulties in achieving a sustainable farm that is productive, profitable and resilient. At the heart of effectively meeting this goal is our relationship with our bank. Ours had partnered alongside us during some of our most challenging times in business. They were with us over the process of our dairy conversion and we achieved more from this than we ever promised. Together, we have worked through some difficult financial scenarios presented by drought, low milk prices and a struggling dairy company. We survived and continued to grow, despite the circumstantial odds against it. And, we stuck by them despite their naïve fumbling with that ill-advised financial derivative – swaps. We forgave and moved on, both learning I hope that while ultimately the power lies with the larger institution, sound judgement doesn’t necessarily follow in quite the same unilateral way.

Like any long term marriage, the success of the relationship had always been in the commitment to honesty and communication. We had never been afraid to have brave conversations and to have them early. We didn’t expect our view points to always be the same, but we did expect there would always be robust processes of discussion, deliberation and consensus to work on our financial “how’s”.

Last year, when the rumours heightened around changes in agribusiness lending, we sat down with our rural manager and asked what those changes meant for us. We expressed concern that the commentaries were suggesting that the implications of bank sentiments were going to impact negatively on farmers. We were open and honest about our goals for the future. We were told that they were there to still work alongside us, that our exemplary behaviour would ensure that commitment remained. In the end, this wasn’t so.

Our relationship with a bank is one of necessity. We need a financial partner and we are fortunate to have a choice in selecting who that new partner will be. And while we have a list of “must-have” criteria such as a commitment to our TEAM (together everyone achieves more) mantra and two-way communication, we will try to look through a prenuptial lens of realism. Banks are large inanimate institutions who sell a product with a priority on mathematical matrixes and insensate policies established in a concrete building far away. Their business predisposition is genetically not inclined to enduring attachments with people. I will try to remember this less than human response as I put together the soup and scones for the inevitable lunchtime visit by the next personable rural manager.